BAKU, Nov. 4 (Reuters) - Azerbaijan's ruling party is poised to sweep the board in a parliamentary election on Sunday, cushioned against calls for democratic reform by the oil producer's strategic importance to the West.
Riding an oil-fuelled economic boom, President Ilham Aliyev continues to consolidate his grip on power since succeeding his father Heydar in 2003, while downtown Baku is blossoming with construction and the opulence of an emerging jetset.
Rights groups accuse the government of curbing freedoms and silencing dissent, but the West is balancing criticism with strategic interest.
The mainly Muslim country of 8.3 million people, sandwiched between Iran, Russia and Turkey at the threshold of Central Asia, is rich in oil and gas and key to Europe’s hopes of reducing its energy dependence on Russia. It is also a transit route for U.S. military operations in Afghanistan.
Western diplomats are unnerved by a 90 percent hike in military spending announced for 2011. Azerbaijan — host to oil majors including BP, ExxonMobil and Chevron — has been locked for two decades in an unresolved conflict with Armenia over the rebel region of Nagorno-Karabakh, and frequently threatens to take it back by force.
"The (democratic) situation won’t change until Azerbaijan runs out of oil money," said independent analyst Zardusht Alizade. "The West is dependent on oil and gas and that’s why it turns a blind eye."
ECONOMIC GROWTH
The opposition is already crying foul, while monitors from the Organisation for Security and Cooperation in Europe (OSCE) say they have received "credible" reports of intimidation and expressed concern over the disqualification of candidates.
The rulers deny curbing freedoms and silencing dissent, saying voters will reward Aliyev and his Yeni Azerbaijan Party (YAP) for presiding over rapid economic growth that they say has brought better living standards for all.
Gross domestic product (GDP) in Azerbaijan grew by an average of 21 percent per year between 2003 and 2007.
Significant foreign assets, strong international reserves and limited exposure of its banking system to flows on global financial markets shielded Azerbaijan from the worst of the global economic crisis.
But GDP growth is projected to slow to 3.8 percent in 2011, and the International Monetary Fund is urging Azerbaijan to diversify its economy away from heavy dependence on oil exports.
Development of the non-oil sector is limited and critics complain the decadence and high prices of Baku mask poverty in much of the rest of the country.
As for democracy, the government says it is a work in progress.
"We admit that there have been some violations, but we know that violations take place even in developed democratic countries," YAP spokesman Husein Pashayev said in response to the OSCE preliminary report on the elections. "Yeni Azerbaijan did not create any obstacles for opposition candidates and we do not see any worthy competitors."
